The Bureau of Safety and Environmental Enforcement (BSEE) asked the National Academies of Sciences, Engineering, and Medicine (the National Academies) to convene an expert committee to advise on ways that the agency could augment and improve its offshore oil and gas inspection program. Given the expectation that it inspect each offshore facility at least once per year, BSEE faces many challenges as it seeks to fulfill its stated mission “to promote safety, protect the environment, and conserve resources through vigorous regulatory oversight.”1 The challenges include keeping up with rapidly advancing offshore exploration and production technologies, the growing number of more varied and complex facilities operating on the seafloor and in deeper water, and an aging population of legacy platforms operating in shallow water. Although BSEE has taken a number of initiatives to meet these challenges, it faces many constraints and will need to make many strategic-level choices to innovate and evolve its inspection program to keep pace with the continually changing offshore energy landscape.
In sponsoring this study, BSEE acknowledged the importance of adapting its inspection program to become more agile, efficient, and effective. The agency posed a series of questions to be addressed in the study, which the committee interprets as being indicative of the agency’s interest in becoming a more balanced safety regulator that takes a more comprehensive, system-level approach to promoting safety. Thus, to better frame the
study—and to address the questions in a more cogent and strategic way—the committee considered the study charge in terms of BSEE’s aspirations to become more outcome-oriented, data-informed, holistic in the treatment of risk, discerning of new technologies, and adaptable to a changing offshore oil and gas industry.
The committee examined how BSEE has taken steps to pursue each of these five aspirational goals and where there are opportunities for the agency to make even more progress. Major findings on the challenges BSEE faces with respect to each goal are given, followed by recommendations on opportunities. This chapter concludes by mapping each of the findings and recommendations to the themes in the study charge.
Finding 1: To meet the expectation that every offshore facility be inspected at least once annually, BSEE inspectors are scheduled to visit approximately 1,700 to 1,800 facilities per year. The need to devote this inspection “input” places a premium on inspection speed, which is achieved in part by inspectors following a “checklist-like” process for verifying that individual components and equipment are in regulatory compliance. The “output” of inspections tends be measured in the number of violations detected, or Incidents of Noncompliance (INCs) issued. In focusing on these inputs and outputs, inspectors often have limited time to observe operations at the system level or to engage with facility personnel for the purpose of learning and improving safety processes and assessing the safety culture of the operator. The emphasis placed on inspecting all offshore facilities also limits BSEE’s ability to focus on enhancing safety outcomes through more thorough and targeted inspections of activities and facilities that are identified as presenting a higher risk of workplace safety incidents and events having severe safety and environmental consequences.
BSEE’s Gulf of Mexico (GOM) region has instituted a Risk-Based Inspection (RBI) program to supplement its annual compliance-focused inspections of all facilities (BSEE 2019). This supplemental program is indicative of BSEE’s capacity to deploy its inspection resources in a manner that is more outcome-oriented and closely tied to the goal of reducing offshore incidents and their severity. Indeed, the proactive safety alerts resulting from the findings from RBI’s Performance-Based Risk Inspections (PBRIs) exemplify how risk-based inspections can be a valuable tool. They focus inspectors’ attention on components and practices for which there is a valid suspicion or evidence of problems, enabling more prompt and direct actions to solve them (BSEE 2018). Similarly, the Facility-Based Risk Inspection (FBRI) program, which associates certain facility characteristics and performance records with
the potential for incidents, including high-consequence events, provides a sounder basis for deploying inspection resources than a regime that tries to inspect all facilities irrespective of their relative potential failures.
A major challenge for any outcome-oriented approach to inspections in a high-hazard industry is ascertaining when the desired outcome is being achieved—that is, to know when the inspections are having an appreciable effect on reducing the likelihood of incidents, and particularly the potential for catastrophic events, which can be rare. Changes in this underlying potential are seldom discernible through the monitoring of annual incident statistics. As it tries to gauge the effectiveness of its programs in reducing the potential for major incidents, BSEE has little choice but to focus on certain inspection inputs and outputs to guide its resource deployments. Ideally, however, those inputs and outputs will have a close and identifiable connection to the outcomes of interest, such as by targeting inspections to activities, components, and facilities for which there is a sound basis for ascribing higher potential for incidents and severe incident consequences. In this respect, the RBI program represents an important step for BSEE in migrating its inspection program away from the traditional emphasis on meeting an annual inspection quota that results in many inspections of relatively low-risk facilities (and thus having limited impact in reducing incidents and their severity).
The RBI program presents an opportunity for BSEE to demonstrate and promote the value of being more outcome-oriented, and less concerned with inspecting all offshore facilities irrespective of risk. A component of the FBRI program is a quantitative model developed by Argonne National Laboratory (ANL) to develop a risk metric for each offshore facility. As described in Chapter 3, the model uses each facility’s recent (1- and 2-year) history of INCs and reported spills and other incidents as a basis for estimating the likelihood of an incident. It also uses information believed to be indicative of each facility’s production levels and complexity (e.g., number of drilling slots, the component count, whether the facility is a major complex) based on the intuitively appealing assumption that such facilities are (a) more likely to have more incidents because of their size and complexity and (b) more likely to have major incidents because of their large volumes of product and population of exposed workers.
The ANL model illustrates how BSEE could use readily available information to align its inspection output more closely with its outcome-oriented goals to reduce the incidence and severity of incidents. The committee learned that when selecting facilities to target for FBRI visits, BSEE supplements the ANL model’s risk rankings with other considerations, such as each facility’s INC-to-component ranking and inspector knowledge of the facility and operator, including their history of equipment maintenance and personnel training. While these unmodeled factors and expert judgments
may indeed be valid predictors of risk, their introduction into the calculus for targeting inspections suggests that inspectors may lack confidence in the ANL model’s effectiveness in identifying higher-risk facilities. In this regard, it is important to note that the ANL model was not obtained using a statistical model such as multiple regression, a probit model that estimates the likelihood that an incident will occur, or more sophisticated techniques, such as a random decision forest, which is a machine learning classification technique. Such statistical models have the advantage of allowing a comparison of parameter coefficients and significance and overall comparisons of the model specifications and goodness of fit. In contrast, there is no measure of the accuracy of the predictions from the ANL model.
The challenge for BSEE’s inspection program is thus two-fold—(a) to continually improve its risk models by verifying and honing their ability to identify higher-risk activities and facilities, and (b) to ensure that the inspector workforce is increasingly accustomed to using such risk-based decision criteria for prioritizing facility inspections. The ANL model was developed in 2013 using data from 2009 to 2012 and based on the characteristics of offshore facilities from that period. BSEE now has access to more modern data analysis techniques and to data on facilities and their performance that are more current and potentially richer. For instance, since the ANL model’s development, updated facility performance measures, including records of INCs and incidents from more recent years, have been added to BSEE databases. The databases also contain more current information on the characteristics of newer offshore platforms, such as their remote monitoring capabilities. SEMS audit findings, and near-miss incident reports by operators, which have been collected by SafeOCS since 2015, offer yet another opportunity for using more kinds of data to inform risk modeling. Given improved databases and more sophisticated analytic tools, a new risk-ranking model may be developed directly from the analysis of the data with less need for subjective interpretation and expert judgment.
BSEE may want to consider whether a single “one-size-fits-all” model is desirable and whether it might be replaced or supplemented by separate models that focus on the potential for workplace safety and health incidents and the potential for catastrophic safety environmental events. While poor facility or operator performance that leads to workplace health and safety incidents may be correlated with a higher likelihood of catastrophic events, one would expect that the magnitude and types of risks associated with the newer, larger, and more complex deepwater facilities would be modeled differently than those associated with smaller but often older and more lightly manned platforms operating in shallow water. Consideration might also be given to creating risk-based models for prioritizing inspections that are targeted to specific critical equipment such as blowout preventers, undersea pipelines, and major operating equipment such as cranes.
Recommendation 1: Because the prevention of both workplace safety incidents and catastrophic events is central to its mission, BSEE should ensure that its inspections are focused on achieving these outcomes, supported by a sophisticated and continually refined and validated risk modeling capability for effective, outcome-oriented targeting of inspection resources. BSEE’s existing Risk-Based Inspection programs do not make clear distinctions about when modeling is intended to inform inspections aimed at preventing workplace safety incidents versus incidents having catastrophic safety and environmental outcomes. Moreover, BSEE’s Risk-Based Inspection programs remain a supplemental element of the overall inspection program, and the models that support them have not been the subject of continual evaluation, improvement, and validation. Risk identification, modeling, and analytic capabilities, including capabilities for identifying emerging risks and risks associated with human, system, and organizational factors, should be a fundamental and continually maintained and enhanced capability of the agency to inform inspection decision making.
Finding 2: Although BSEE has taken steps to become more data-informed in the deployment of inspection resources, such as through its Risk-Based Inspection programs, considerable opportunity remains for the agency to improve the consistency, timeliness, and completeness of its INC records, incident reports, and other databases (possibly to include data gleaned from SEMS audits) to make them more useful for internal decision making and external reviews that can improve the efficiency and effectiveness of the traditional inspection and SEMS oversight programs. Opportunities for the latter include determining which new and different data could yield more value and be more analyzable to inform better safety management practices.
In ramping up and expanding its data analysis activities and using the results to inform program decisions and safety assessments, BSEE will undoubtedly find critical gaps and needed improvements to the relevance, timeliness, and accessibility of the safety and environmental data it collects and manages. In cases where data have been gathered and reported for years without being regularly or creatively used—internally or externally—shortcomings in their quality and relevance will become more evident through increased use and reliance, revealing where quality and richness enhancements are needed along with more timely gathering and reporting. In demonstrating the value of data for furthering its safety mission, BSEE should motivate more accurate and responsive reporting by an industry that is more confident that the information it reports is being used for beneficial purposes. An example of where the reporting of higher-quality data can
be beneficial to both operators and BSEE is the inspector’s review of an operator’s Job Safety Analysis (JSA), which consists of a hazard assessment and procedural guidelines for the safe performance of routine tasks. The SEMS rule requires a JSA plan and for that plan to be communicated effectively to personnel. However, the evidence of whether a JSA plan meets the regulatory requirement is that an operator must have a signed JSA on the facility. Records of noncompliance in this case will offer an incomplete picture of the JSA’s effect in the absence of a measure of its communication to workers. Inspections and records that are designed to ascertain the extent and effectiveness of a JSA’s communication can motivate and inform good operator practice.
Yet, even as the demand for higher-quality and more timely data increases in response to more purposeful and systematic uses, BSEE will need to take steps to meet this demand—such as by establishing well-defined standards for submitting newer data (including validation tools), exploring creative ways to obtain certain kinds of information (such as sensor data records that are collected by the operator), and strengthening its own analytic tools and techniques (such as machine learning techniques and fault code analysis). Indeed, in recognizing some of these needs, BSEE has recently started to incorporate instruction modules on data analysis and application in its inspector and management training programs, as discussed in Chapter 3.
The recruitment, retention, or contracting of more data analysts, however, will be required to fully deliver on the agency’s aspiration to be more data-informed. Among the digital competencies that will be needed are data analytics, presentation, and visualization skills, which can be essential for translating the insights gained from data analysis into products that can be used more readily and effectively by agency leaders and managers, as well as by inspectors, engineers, and other field personnel.2
Making usable, accurate, and current data available to the public in the form of downloadable datasets, data visualization applications, and publications is essential, not only for providing transparency and public confidence but also to capitalize on insights that can be gained by enabling others (from outside BSEE) to perform analyses. Because offshore oil and gas safety can be controversial, such data transparency is important for this reason alone, but it will also allow external parties—whether offshore operators, academic researchers, or advocacy groups—to use the data in different ways by applying alternative viewpoints and analytic skills that can result in analyses and conclusions that may otherwise have been missed.
2 For guidance on the use of artificial intelligence systems by federal agencies, see https://www.acus.gov/research-projects/agency-use-artificial-intelligence and https://www.napawash.org/uploads/Using_AI_to_Improve_the_Fairness_and_Equity_of_Government_Decision_Making.pdf.
To exploit these benefits, however, BSEE will need to keep the information current, as accurate as possible, well formatted, consistent, and clearly communicated through documentation.
Recommendation 2: To further its goal of increasing data transparency and facilitating its internal and external use, BSEE should invest in more advanced and creative data collection, analytic and visualization tools, and infrastructure; corresponding data management, analysis, and evaluation capabilities among its personnel; and an outward-facing, online data system that can be navigated with ease and kept current across all fields for the purpose of encouraging and facilitating safety analyses.
Finding 3: Although BSEE has made continual improvements to its SEMS program and taken some limited steps to assess operator safety culture in its facility inspection protocols, the focus of the inspection program remains centered on physical components and equipment and on identifying and seeking to correct the proximate causes of noncompliance and failures. Insufficient attention is given to human-systems integration and the underlying role of human factors and organizational systems in developing a safety culture.
How, if at all, should BSEE employ its regular inspection workforce to verify that operators are complying with SEMS requirements and following their own SEMS programs is a question that BSEE struggles with. BSEE’s inspectors lack familiarity with each operator’s customized management system and they lack training and certification as safety management system auditors. Moreover, they are accustomed to following a list of Potential Incidents of Noncompliance (PINCs) that is not well suited to discerning whether an operator is conscientiously following its required SEMS program such as for identifying, assessing, and controlling all significant potential hazards.
Thus, BSEE’s main SEMS enforcement role to date has been to work with the American Petroleum Institute’s Center for Offshore Safety to improve the ability of third-party auditors to detect weaknesses in operators’ SEMS programs and their execution, and to help strengthen the programs and their implementation. Although BSEE is able to conduct its own “directed” SEMS audits if the findings from a third-party SEMS audit indicate that such additional scrutiny is warranted, the agency has conducted only a handful of them. While some SEMS audit findings are apparently shared with inspectors on a monthly basis, the results are not translated
into specific inspection items, and probably for good reason because using the standard “checklist-like” approach to inspections for assessing SEMS adherence would run the risk of introducing a compliance mindset for SEMS implementation that distracts from the desired emphasis on safety assurance, learning, and continual improvement.
The committee was informed, however, that BSEE inspectors are given a short set of questions asking them for post-inspection observations about aspects of a facility’s safety management process, apparently as a means of gauging the operator’s SEMS implementation and its safety culture. While the questions, which were shown in Box 3-4, could potentially yield some useful insights for follow-up activity, their subjective and cursory nature seem to be more indicative of a lack of confidence by BSEE that traditional inspections can play a meaningful role in assessing the implementation of a SEMS program and its impact. The origins of the questions are unclear but do not appear to have been developed in consultation with BSEE’s SEMS experts or other safety management professionals.
As discussed in Chapter 3, the experience of oil and gas safety regulators from the United Kingdom and Norway suggests that for a regulator to assess an operator’s SEMS program during inspections or incident investigations it must have personnel who have a strong holistic or integrated understanding of offshore operations and systems. The United Kingdom and Norway regulators recruit personnel with such operational and specialist backgrounds, and they are responsible for confirming that the customized safety management programs of operators are thorough and follow professional standards and well-established practices for identifying, assessing, and mitigating risks (e.g., the operator is conducting hazard and root-cause analyses and imposing barriers). Similarly, to help guide its oversight of vessel operators and recognized organizations, the U.S. Coast Guard (USCG) has recently established an internal safety management system (based on an International Organization for Standardization 9001 Quality Management System) or Mission Management System. The USCG understands that such oversight responsibilities require marine inspectors to be trained to meet the qualifications for auditors under the International Safety Management code (the international standard for the safe management and operation of ships and for pollution prevention). Trained in safety management concepts, these USCG marine inspectors are capable of assessing vessel operator safety management program quality and implementation and also to work with operators to continually improve their programs and their execution.
The United Kingdom and Norway offshore regulatory approaches have their origins in major reforms introduced more than 25 years ago following the investigation of offshore catastrophes, which led authorities to question the effectiveness of traditional regulations consisting mostly of detailed equipment, procedure, and design specifications (TRB 2018).
Unlike BSEE’s introduction of SEMS as a supplement to the existing regulatory regime, the reforms instituted in the North Sea went much further by making major changes to inspection methods and workforces in accordance with the new requirements for operators to establish and implement safety management plans. Both the United Kingdom and Norway placed greater emphasis on collaboration among regulators and operators to ensure safety. Hence, rather than auditing each operator’s safety management plan strictly for the purpose of verifying adherence to all required planning elements, the regulators review the plans and then meet with operators to offer suggestions on where and how they could be improved. They likewise view facility inspections as opportunities for the regulator to assist the operator in strengthening the safety management plan and its implementation by observing operations and practices. For instance, when UK inspectors find a problem on a facility that does not pose a safety threat requiring immediate intervention, they will work with the operator to solve the problem through a combination of near-term technical and operational responses, as well as through longer-term organizational changes—such as those intended to create a stronger safety culture—as appropriate.
Such extensive engagement and collaboration require regulators to have personnel with a level of technical competency and industry and organizational knowledge that exceed what is needed to verify and enforce compliance with well-defined regulatory requirements. BSEE has made some changes to transform its traditional inspection workforce and compliance activities in a manner similar to that of the United Kingdom and Norway. A greater movement in this direction would be consistent with the aspiration of thinking more holistically about how the inspection program can work proactively and systematically with operators to prompt and enable them to reduce and more effectively manage their risks.
To augment its role in providing external verification and oversight of regulatory compliance, BSEE might consider how it can help operators find ways to assess and strengthen their organizational safety culture. For example, a 2016 study of inspectors, investigators, and auditors from the oil and gas industry in Canada and the United States (including BSEE)3 identified a series of organizational attributes that can serve as possible indicators of the strengths and weaknesses of an operator’s safety culture, including committed leadership, vigilance, empowerment and accountability,
3 See https://www.cer-rec.gc.ca/en/safety-environment/safety-culture/safety-culture-indicatorsresearch-project-regulatory-perspective.html. Working group members involved in the study included representatives from the Canada Energy Regulator (previously the National Energy Board), the Canada-Newfoundland & Labrador Offshore Petroleum Board, the Canada-Nova Scotia Offshore Petroleum Board, BSEE, the Pipeline and Hazardous Materials Safety Administration, the Alberta Energy Regulator, and the British Columbia Oil and Gas Commission.
and resiliency (described in Box 5-1). The working group suggested that regulators might want to consider developing appropriate methods or tools that an offshore operator can use for self-assessments of these attributes, and to also consider how their own regulatory requirements and processes can help foster or reinforce them (e.g., spur operator vigilance and accountability). The group emphasized, however, that assessment tools should not be incorporated into regulatory compliance verification and enforcement
mechanisms, such as in inspection or audit protocols, so as not to encourage behavior focused on satisfying the protocol rather than making continuous improvement.
BSEE’s SEMS requirements were intended to shift the industry’s attention away from a singular emphasis on regulatory compliance toward a more balanced interest in managing risk and ensuring that their processes and practices are safe. That shift has proven to be challenging for both industry and regulators alike, but BSEE can help bring it about through a more deliberate, multipronged strategy that uses both SEMS and traditional regulations to prompt and encourage the development of a strong safety culture among operators and their contractors. Such a strategy might include, for instance, supplemental inspector training in identifying risks from human and organizational factors, a coordinated effort by the national office to ensure that audit findings and corrective action plans from operator SEMS programs are utilized consistently across BSEE regions, expectations that new operators undergo a SEMS audit before being allowed to operate, and developing and promoting methods or tools that offshore operators can use for self-assessments of their safety culture.
Recommendation 3: BSEE should take purposeful steps to reposition and reshape its inspection and SEMS audit and oversight programs so that they learn from one another and work in concert to improve regulatory compliance; strengthen safety management planning, execution, and effectiveness; and exhort, support, and sustain the conscious efforts of operators to build and maintain a strong safety culture. Although BSEE has taken initiatives to improve both its inspection and SEMS audit programs, they continue to function along separate tracks, each aimed at improving safety in its own way but with limited regard for how they can communicate, collaborate, and inform one another to support continual improvement, including the fostering of strong organizational safety cultures. Although BSEE’s mission to promote offshore safety and environmental protection should not be changed by such a reorientation, the tools it possesses for achieving its mission would become more varied, comprehensive, and robust.
Finding 4: The offshore oil and gas industry has been characterized by rapid technological change, particularly in recent years. New technologies are in use and being introduced that, among other things, improve offshore connectivity and enable remote sensing and monitoring of facility conditions and operations, including facilities located on the seafloor. These developments are providing many new opportunities for BSEE to enhance and
improve the effectiveness and efficiency of its inspection program. While the agency is monitoring these industry developments, it has limited ability to exploit them, in part because it may lack personnel having the requisite technical expertise and industry backgrounds to take fuller advantage of the industry’s technological advancements.
The promise of budgetary savings, improved workforce productivity, and new inspection, monitoring, and analytic capabilities are reasons to be attuned to new technologies and their potential. However, in having a limited budget, BSEE faces constraints on the technologies it can acquire, as well as its ability to recruit and train personnel who are qualified to use them. Under these circumstances, it is essential for BSEE to pursue new technologies, but in a manner that leverages the technologies of industry as much as possible. Several examples of opportunities for such leveraging are given next.
Offshore operations are becoming less person dependent through remote and automated operation. As an example, the Norwegian energy company Equinor has introduced a fully automated oil and gas platform in the North Sea. The company’s unmanned Oseberg Vestflanken H platform is operated remotely from a field center control room about 5 miles away.4 Operators in the GOM are increasingly producing from wellheads on the seafloor and hosted from fixed or floating production platforms or installations on shore. Increasing use of these autonomous floating and subsea facilities, which blur the lines between remote and on-location facilities, will make it incumbent on BSEE to apply new inspection approaches because the agency’s inspectors may not be able to visit these facilities. Classification societies, such as the American Bureau of Shipping, currently provide guidance for conducting remote inspections (ABS 2019). In fact, because of pandemic travel restrictions of 2020, Det Norske Veritas–Germanischer Lloyd (DNV-GL) and an operator on the Norway’s continental shelf conducted a pilot program where DNV-GL’s onshore personnel remotely inspect the operator’s offshore cranes.5
Onshore control centers and remote real-time monitoring (RRTM) facilities offer the opportunity for more inspection activity to be performed without traveling to the platform. RRTM capabilities are attractive to operators for optimizing well drilling, maintenance, and production as well as to improve risk management through early and rapid detection and diagnoses of anomalies. These capabilities are now mandatory for some
well drilling control operations.6 RRTM facilities are not currently a major part of BSEE’s inspection regime, but as they become more commonplace the agency will have the opportunity to think more broadly about how to employ them for inspection effectiveness and efficiency. For example, inspectors could visit RRTM centers for pre-inspection activities, stop-work protocols (i.e., exception-based intervention/surveillance that minimizes distraction to operations), pre-inspection document reviews, and witnessing some testing activity when video and voice communications are available. Gaining this access, however, is likely to require the development of guidelines to keep data obligations for operators at a manageable level while also ensuring that BSEE can access sufficient data to fulfill its inspection requirements. Inasmuch as the use of RRTM for monitoring and inspection purposes could run the risk of blurring the line between regulating and operating, the guidelines will likely need to define each party’s respective roles.
It will also be important for BSEE inspectors to understand how RRTM capabilities, coupled with advanced analytics, are changing how offshore equipment is being operated and maintained. For example, machine learning is enabling condition-based maintenance (CBM) by creating a predictive capability that can augment traditional interval-based inspections. The development of digital twins, combined with robust real-time data required to implement CBM and remote monitoring, will offer more opportunities for using advanced analytics to evaluate physical asset properties and responses to operating conditions. Here too, it will be important for BSEE inspectors to have familiarity with these data analytics and advanced technologies because they will be used increasingly to inform operator decisions about equipment maintenance, replacement, and availability.
Although it is not possible in this report to identify and discuss all of the opportunities that are on the horizon for BSEE to capitalize on, it merits noting that the agency has certain means at its disposal to influence technological changes so that they align better with the requirements of the inspection program. Notably, the statutorily authorized Best Available and Safest Technology (BAST) review process offers BSEE a means for requiring the use of remote control and monitoring technologies that can serve inspection requirements, particularly for new facilities that are not physically accessible or are difficult to access. While BSEE has not used its BAST authorities to an appreciable degree, they remain a potentially important tool for assessing new technologies and incorporating them into the inspection regime, provided that such assessments do not delay or hinder the introduction of safety-beneficial technologies.
Recommendation 4: BSEE should articulate a vision for how advances in offshore technology can be leveraged to fulfill its safety oversight and inspection functions, where they will need to be leveraged, and how they can improve the performance and meet the demands of the inspection and SEMS programs. BSEE should collaborate with industry on the expertise and management processes that will be required to pilot and then implement new strategies that make effective use of technological advancements. Consideration should be given to how the Best Available and Safest Technology process can used to be encourage the development and introduction of technologies that can improve offshore oil and gas safety and environmental management and performance while also providing BSEE with the capabilities needed to fulfill its safety oversight and inspection functions.
Finding 5: BSEE has undertaken many initiatives over the past decade to improve the effectiveness and efficiency of its inspection program; however, the fast-changing offshore energy operational landscape is making it increasingly important for BSEE to make adaptability a principal trait of its operations as well as its organizational structure and culture. Numerous factors, including some over which BSEE has little control, hinder the agency’s ability to adapt to a changing offshore industry. However, BSEE must adapt or risk becoming an outmoded and less effectual safety regulator.
If BSEE succeeds in making its inspection program more outcome-oriented, data-informed, holistic in the treatment of risk, and discerning of new technologies, its ability to adapt to a changing industry will undoubtedly improve. A continuing goal for BSEE, however, will be to make adaptability an intrinsic organizational feature, one in which each of these qualities is the subject of continuous learning and improvement and not allowed to become rigid and static as characteristic of its INC-based inspection regime. In the committee’s view, BSEE’s capacity to adapt will depend on its ability and willingness to view itself as being more than enforcer of regulatory compliance but also a safety advocate. As discussed above, when regulators assume this expanded role, they can be more agile and adaptable, able to select the appropriate intervention or other response that suits the situation. Indeed, regulators in other domains and countries such as those in the North Sea have found that enforcement and advocacy can coexist and achieve positive results.
BSEE has taken some steps to add new features to accompany its traditional regulatory compliance verification and enforcement programs. For instance, the committee understands that BSEE has signed an interagency agreement with its sister agency the Bureau of Ocean Energy Management
to implement a risk management and financial assurance program to ensure that lessees are fully capable of fulfilling their lease obligations, including safe decommissioning of wells, and that they maintain proper levels of bonding in the event that a bankruptcy threatens this ability.7 Thus, as BSEE strives to become more balanced and adaptable to industry changes, it can take advantage of such initiatives—for instance, by potentially exploring “fitness to operate” metrics for all new operators bidding on leases. In the same vein, BSEE’s growing experience with SEMS audits and corrective action plans provides it with an opportunity to think more broadly about the potential to augment its inspection program by delegating capable third parties to conduct other inspection activities that are not being, or cannot be, fulfilled by its own inspection personnel whose deployments are constrained and whose competencies and skillsets can be narrowly focused.
Even as BSEE adapts in these ways, it cannot simply accept the status quo of a growing misalignment of its workflow demands and inspector deployments and resources across regions and districts. Significant potential exists for innovative responses to this misalignment in addition to reducing and realigning districts—for instance, by incentivizing inspectors to be part of teams that can redeploy quickly to other locations or districts on the basis of changing inspection demands and opportunities. Here again, BSEE has shown signs of flexibility in its inspection approach, as evidenced by “blitz” inspections that are guided by performance-based risk assessments. Whereas describing the fundamental safety assurance goals of BSEE’s inspection program should be easy, describing the many and varied ways in which it seeks to further these goals should be more difficult, involving activities that go well beyond an annual facility visit and compliance-based list of PINCs.
Recommendation 5: To make adaptability a fundamental characteristic of its safety assurance approach, BSEE should give priority to increasing its organizational agility, the absence of which has become an impediment to keeping pace with the fast-evolving offshore oil and gas industry. This impediment is likely to become even more problematic as the industry’s technological sophistication and capabilities, operating methods, and scale and location of drilling and production activity change. An important starting point will be for BSEE to develop and institute an internal management system, similar to that of the USCG, that establishes agency-level priorities and that guides and supports the full complement of needed adjustments in resources and personnel competencies and deployments to further those priorities—for instance, by ensuring that GOM districts and associated inspector workloads and distances traveled reflect the location of offshore
facilities and their risk profiles and by making timely corrections and/or adjustments when they do not. BSEE must overcome the mindset that traditional approaches should be preserved in the face of change—such as the judicious use of third-party inspections to augment its program, the use of technology to supplement and/or substitute for some on-site inspections, and the creative makeup and deployments of ad hoc inspector teams. Without necessary changes, BSEE’s agility and adaptive capacity could be severely constrained along with its ability to keep pace with the industry’s changing risk profile.
Theme 1: Is BSEE’s inspection program effectively meeting its regulatory mission?
The committee recognizes that BSEE defines its central mission as being “to promote safety, protect the environment, and conserve resources through vigorous regulatory oversight.” The committee encourages BSEE to take a broader view of what constitutes regulatory oversight consistent with its mission to “promote” safety and environmental protection. By requiring operators to have a SEMS program, BSEE has made it clear that operators are in the best position to know their many context- and facility-specific risks, including those inherent in their operations and organizations. SEMS programs are intended to ensure that operators prevent and control these risks in a deliberate and ongoing manner, directing more inspections to facilities, components, and activities that show signs of higher risk. Meanwhile, BSEE has been moving away from a once singular emphasis on inspection counts and verifying compliance to being more purposeful and proactive in trying to identify and inspect facilities, components, and activities that pose higher risks when weighing the likelihood of failure and potential for severe consequences. To further its mission to promote safety through even more varied means, however, BSEE should modify its inspection approach even more by placing greater emphasis on problem prevention and solving by thinking and acting as a safety advocate that seeks to motivate, teach, inform, and model safe behavior. Safety regulators in other countries and sectors have shown that safety advocacy can go hand in hand with compliance enforcement if these roles are understood and made explicit to guide inspection methods and practices.
Theme 2: Evaluate BSEE’s current Risk-Based Inspection program and provide recommendations for improvement.
An emphasis of this report is on ways that BSEE can focus more on desired outcomes, as opposed to inputs and outputs, with risk reduction being the
main outcome of interest. As a high-hazard industry that has day-to-day workplace safety and environmental pollution concerns but also the potential for infrequent, very high-consequence events, offshore oil and gas operations present special challenges for regulators in assessing and measuring the ongoing effectiveness of efforts to reduce risk such as by eliminating creating barriers to hazards. Ascertaining their actual effectiveness in reducing the occurrence of disasters can be particularly challenging because such events can be rare. To its credit, BSEE has augmented its long-standing emphasis on annual inspection counts (i.e., inspecting all offshore facilities each year) with risk-based inspection initiatives that target facilities and components for additional and enhanced inspections based in part on evidence of past and recent incidents, on records of noncompliance, and on facility characteristics. As already noted, these initiatives should help BSEE deploy its inspection resources more effectively to achieve the desired outcome of risk reduction. It is further recommended that BSEE take deliberate steps to coordinate the traditional inspection program with its SEMS audit program, ensuring that they are communicating and informing one another. An important purpose of SEMS is to require operators to take explicit steps to identify the risks arising from their operations and to eliminate or control them using barriers and other process safety measures. Accordingly, BSEE’s familiarity with a wide array of operator SEMS programs and the varied risks that they seek to control should help the agency design and implement an inspection program that targets the sources of risks more effectively. In not having specific expertise in the planning and execution of safety management systems, it would be unreasonable to expect BSEE inspectors to verify operator adherence to their facility-specific SEMS plans; however, inspector familiarity with the elements of SEMS plans generally is desirable. The plans can provide insights for the inspection program’s targeting of higher-risk facilities, processes, and components.
Theme 3: What proven value-added practices by other international regulators, such as but not limited to Norway, the United Kingdom, Australia, and Mexico, can be best employed by BSEE to supplement its current inspection program?
In accordance with the recommendations in this report, BSEE should reposition and reshape its inspection and SEMS audit programs so that they are sufficiently coordinated and complementary to help exhort, support, and sustain the conscious efforts of operators to improve their safety management systems and develop and maintain a strong organizational safety culture. The committee acknowledges that fully integrating the two programs would be challenging for BSEE because it would require significant changes to its inspection methods and workforce, at least in the short term. The experience of the North Sea oil and gas regulators of Norway and the
United Kingdom, however, suggests that for BSEE to become the kind of regulator recommended in this report—one focused less on compliance verification and more on safety advocacy and engagement and collaboration—it will need to modify the composition of its workforce to ensure that it has ample offshore oil and gas operational experience as well as industry and organizational knowledge. Changes in workforce composition can take time for any federal agency; however, to keep pace with a changing industry, BSEE will need to have the technical capacity to collaborate more with industry, and particularly to leverage advanced technologies (such as remote monitoring) and incorporate them into inspection processes and strategies.
Theme 4: What processes could BSEE use to determine the activities that a third party could perform in support of inspection and verification functions?
This report recommends that BSEE make adaptability a fundamental characteristic of its safety assurance approach and that it be open to alternative methods for keeping pace with the fast-evolving offshore oil and gas industry. This adaptability could very well include the judicious use of third-party inspections to augment its current program, which are not unusual to government inspection and verification regimes, and indeed are a central feature of the vessel inspection programs of the USCG, which BSEE could consult. Third-party audits are already a feature of the SEMS program, and in this regard, the committee’s recommendation that BSEE begin to better coordinate its inspection and SEMS audit programs will have the advantage of making BSEE inspection personnel more capable of learning from the audits. Although few BSEE inspectors may be qualified to review SEMS plans and their implementation, more communication, collaboration, and cooperation between the inspection and SEMS audit programs can inform the former’s continual improvement by understanding how operators respond to audit findings.
Theme 5: What is the appropriate role of real-time monitoring and other safety-enhancing technologies for the BSEE inspection program?
As recommended in this report, BSEE will need to articulate a vision for how advances in offshore technology can be leveraged to meet the demands of its inspection and SEMS programs, consistent with the need to maintain accountability and the appropriate division of responsibilities between regulator and operator. Because offshore operations are becoming more automated and less person dependent, BSEE will have no choice but to rely on remote and real-time monitoring technologies for at least some inspection activity, inasmuch as inspectors will not be able to visit subsea facilities. Minimizing the need for helicopter transportation and its associated risks and costs should also be considered as an important benefit
from exploiting technology effectively. BSEE’s BAST process can be used to encourage the development and introduction of technologies that can serve these purposes.
Theme 6: What current and potential policies, risks, technologies, and practices should BSEE consider in evolving the inspection program in the near term and the longer term to enhance safety and environmental protection?
The six themes and nearly two dozen questions in the study charge are interrelated and indicative of what the committee views as the agency’s aspirations to make the existing inspection program more effective and efficient, for instance, by placing additional emphasis on safety management and process safety and by employing risk-based inspection processes and real-time remote monitoring technologies. This final theme and the questions posed also make it clear that BSEE is open to making fundamental changes to its inspection program, and indeed that BSEE recognizes the imperative for doing so over the longer term. The report’s five recommendations on actions that BSEE should take will require changes in policy and practices as well as in BSEE’s application of advanced technologies. To recap, the committee believes that BSEE should evolve its inspection program to make it more outcome-oriented, with a particular focus on ensuring that inspections are informed by a continually improved and refined capacity to target higher-risk facilities and activities and by making investments in more advanced and creative data collection, analytic, and management capabilities. Furthermore, BSEE should articulate a vision for how and where to leverage advances in offshore technology to meet the demands of the inspection and SEMS programs, including making more effective use of the BAST process to encourage the development and introduction of technologies that can improve offshore oil and gas safety and environmental management and performance. These represent near-term, and not especially risky, opportunities for BSEE to adapt its policies and practices in ways that can strengthen the inspection program’s role in furthering offshore safety and environmental protection. The longer-term, and potentially more demanding, challenge for BSEE will be in repositioning and reshaping the inspection and SEMS oversight programs so that they work more in concert with one another to improve regulatory compliance, strengthen safety management, and support strong safety culture in the offshore industry.
ABS (American Bureau of Shipping). 2019. Guidance Notes on the Use of Remote Inspection Technologies, February. American Bureau of Shipping, Spring, Tex. https://ww2.eagle.org/content/dam/eagle/rules-and-guides/current/other/242-gn-remote-inspection-tech/ritgn-feb19.pdf.
BSEE (Bureau of Safety and Environmental Enforcement). 2018. Crane Hazards Identified by BSEE in Risk Based Inspections. Safety Alert No. 332, May 11. https://www.bsee.gov/sites/bsee.gov/files/safety-alerts/safety-alert-332-crane-hazards-identified-by-bsee-in-riskbased-inspections-5-7-18.pdf.
BSEE. 2019. Risk Based Inspections: Assessment Report, May. https://www.bsee.gov/sites/bsee.gov/files/reports/bsee-rbi-2019.pdf.
TRB (Transportation Research Board). 2016. Special Report 322: Application of Remote Real-Time Monitoring to Offshore Oil and Gas Operations. Transportation Research Board, Washington, D.C.
TRB. 2018. Special Report 324: Designing Safety Regulations for High-Hazard Industries. Transportation Research Board, Washington, D.C.